Q: Are Wisconsin Banks Permitted to Pull Credit on a Non-Signing Spouse of a Loan Application?
A: Yes. When dealing with married Wisconsin residents, a bank is permitted to pull credit on a non-signing spouse, and may even be required to do so.
Wisconsin Section 766.56(1) requires creditors to consider all marital property available to satisfy the debt when evaluating a married Wisconsin resident's application for family purpose credit. Where there is an obligation in the interest of the marriage or family, being a "family purpose" obligation, the creditor must consider all marital property available to satisfy the obligation in the same manner that it considers the availability of property of an unmarried applicant. While the law does not define “family purpose,” the presumption is that an obligation incurred by a spouse during marriage is family purpose. Additionally, income would be presumed to be marital property unless there is a marital property agreement indicating otherwise.
Regulation B Section 1002.5(c)(2) allows the bank to request information about the applicant's spouse if the applicant resides in a community property state or is relying on property located in such a state as a basis for repayment of the credit requested. Because Wisconsin is a community property state, banks are permitted to pull credit on a non-signing spouse. Because the Wisconsin Marital Property Act requires creditors to consider all marital property available to satisfy the debt, a bank may be required to do so.